- How to manage capital?
The core of capital management is to balance your psychology. That is, the strategy of capital division and capital rotation so that in situations of temporary loss, our psychology does not lose direction and fluctuate strongly. Pay special attention to the two words SPLIT and CAPITAL ROTATION.
- Managing capital
My experience of managing capital is to handle losses ( we do not talk about the case of profit because when there is a profit, we have to discuss the next investment plan).
- Investment portfolio
The portfolio must be extremely compact so that it can FOCUS & FOLLOW the projects in the hold. Do not spread out too much which can weaken your finite resources (money, time, effort), do not get caught up in the effect of "the grass is always greener on the other hill”
- Effective portfolio management
From my viewpoint, an optimal portfolio will include two long-term projects, up to three mid or short-term projects, and especially important is that a portion of USDT, or stable coin, spare capital, equivalent to 1/2 of the total volume of the mid or short-term project. For example, if the total volume of the three mid or short-term projects is $3,000, the minimum spare USDT amount is $1,500.
The most important thing when it comes down to money is ENTRY, the next important thing is ENTRY. Finding and being able to evaluate whether a project has potential is a matter of EXPERTISE, not an investment issue. Investment is a matter of ENTRY, how to disburse capital into the project, and the divestment strategy (profit taking). Good ENTRY is usually the moment at the beginning of a coin's new upcycle and must coincide with the new bull cycle of the overall market.
- THINK ABOUT STABLE COIN BACKUP
USDT is seen as a group of almost unprofitable coins. because of this mindset, many people sit still and always try to exchange them into other cryptos. BIG MISTAKE. USDT must be considered as the holding capital with the highest rate of successful profitability. It's a stable coin, but it's the most stable in terms of profitability. For example, holding $1,500 a month still has no interest, but as long as the market crashes one shot, holding that $1,500 to pick up the bottom of the backs like BNB or LINK, the rate of profitability is huge. (No "grass coins", this in practice requires you to know a little technical analysis and have knowledge of charts and common indicators. Or more simply, someone can give you a mentor on this professional matter.) So that $1,500 is no longer a stable coin, it's exactly an investment in waiting time for market events. Pay close attention, this USDT is not for DCA for any bet. While the market collapses, the projects in charge are suddenly bleeding and can still have the capital to eat 20%-30%, the PSYCHOLOGY is once again stabilized. In short, having USDT backup is a very beneficial move.
- DOLLAR-COST AVERAGING (DCA)
If we intend to enter a coin with a total volume of $1,000, we usually enter the first order of about $300 - the next DCA order is $300 when the price drops by 30% and the last DCA order $400 when the price drops 50%. If the average price is still down by 20%, please give up on that bet. The mistake is that many people plan $1,000 for a bet and also charge an unspecified private DCA for that bet, then doing something that has no clear limits while money has limits.
It is advisable to distinguish USDT capital so that the DCA for one investment is different and separated from the part of the USDT reserve mentioned above. The way to handle falling into a loss of 1 investment is that the remaining USDT after this loss will be rotated into one of the following two ways:
+ The first is the USDT provision, be PATIENT WAITING for the opportunity of the market to fall, additional reserves would be used for DCA
+ The second is to increase the amount of holding for long-term coins that we determine to invest value in it in good price zones.
When you take losses without knowing what to do, there is little hope. If you are in profit, you don't talk about it. If you want to do that, one fatal point is that the portfolio must be super-lean. It is best not to hold more than 5 coins and some part of it should be stable coins (USDT redundancy). Holding too many projects at the same time will get you in great trouble. So I often find reasons to try less or refuse to enter the new coins regularly so as not to enlarge the portfolio. If you find any project too good to pass, then restructure capital, move flexibly between projects, not expand. Once the portfolio is appropriate, it's less likely. Of course, there must be flexibility not to be too stubborn about holding to die.